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U.S. Labor Department allows unemployment benefits for coronavirus

reuters.com

31–40 of 96 posts

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#31
post #4

Earlier quoted context omitted.

If we can afford a $1.5 trillion injection into the markets, then we can afford moving the SS retirement age to 60 where the most vulnerable exist.

The $1.5 trillion injection doesn't actually cost any money. The Fed is making short-term fully-collateralized loans.

Technically lowering the SS age doesn't cost any money either. The government controls the money supply; they could just print money and hand it out.

The real problem is that if they did this it wouldn't actually have any real short-term effect other than making the things seniors want to buy more expensive. Money's a fiction: it's purpose is to incentivize people to produce things that other people want. If you increase the amount of money in a population but don't increase the supply of goods, it just means everything gets more expensive. You still have the same amount of hospital beds, senior living centers, cruise berths, golf courses, etc. to go around but now the market-clearing price of buying one goes up, some fraction of poor old people end up without one, and their spot is taken by a richer young person.

Over the long-term there's a reallocation of labor that actually does change things: that senior might retire and his job will be filled by someone younger, or people who might've gone into pediatric nursing instead work at a nursing home, or luxury condos might be converted into assisted living. All of these have unintended consequences that ripple down to others, eg. if condos are converted to senior homes it raises the price of housing for young people.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#32
post #9

Earlier quoted context omitted.

You say that as if liquidity management in a crisis wasn't a thing. Why, exactly, should free temporary cash be available to investment banks but not entitlement programs?

Banks have assets to offer as collateral for those loans. What assets do entitlement programs have to offer as collateral?

How about a $2,790,000,000,000 trust fund? Is that asset enough? I think a big problem with this discussion isn't about public policy, it's that people don't understand how social security works.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#34

Earlier quoted context omitted.

The $1.5 trillion injection doesn't actually cost any money. The Fed is making short-term fully-collateralized loans.

Technically lowering the SS age doesn't cost any money either. The government controls the money supply; they could just print money and hand it out. The real problem is that if they did this it wouldn't actually have any real short-term effect other than making the things seniors want to buy more expensive. Money's a fiction: it's purpose is to incentivize people to produce things that other people want. If you incr…

Printing money and QE are not the same, and it spreads misinformation to equate them.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#35

If COVID-19 digs in deep in the US then there is going to be a transformational change in how US citizens think about work, travel, entertainment, security, and the relationship between US citizens and their government. All of these aspects are intertwined: Work: More people will work more time from home and many firms will switch to virtually full time remote with limited physical gathering. This will decrease the c…

> Entertainment: Many of the sports that have been deferred or canceled will likely be replaced with other forms of entertainment that can be viewed on television or the Internet. Fewer people will go to live performances, both because they can't (cancelled by the government) and reluctant to after COVID clears.

My guess is that you're overstating the long-term effect on this front. People like leaving the house; people like gathering with other people; people have liked these things for as long as there have been people. They're not going to stop liking them because they've been stuck alone indoors for a couple of months. Enforced abstinence for a while may even increase demand for social entertainment, once the dust settles -- "you don't know what you've got until it's gone," etc.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#36
post #13

Earlier quoted context omitted.

As mentioned in another comment, its a loan, not free cash. Investment banks will have to pay it back afterwards.

Sure, but it's basically free money for them because they'll turn around and loan it to the rest of us with higher interest rates.

> it’s basically free money

They can only borrow to the extent they have collateral. You can do the same thing. Any decent broker will let you margin Treasuries on the cheap.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#37

Earlier quoted context omitted.

The $1.5 trillion injection doesn't actually cost any money. The Fed is making short-term fully-collateralized loans.

Technically lowering the SS age doesn't cost any money either. The government controls the money supply; they could just print money and hand it out. The real problem is that if they did this it wouldn't actually have any real short-term effect other than making the things seniors want to buy more expensive. Money's a fiction: it's purpose is to incentivize people to produce things that other people want. If you incr…

> Technically lowering the SS age doesn't cost any money either. The government controls the money supply; they could just print money and hand it out.

The government doesn’t do this though. That’s why there is confidence in the USD.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#38

Earlier quoted context omitted.

The $1.5 trillion injection doesn't actually cost any money. The Fed is making short-term fully-collateralized loans.

Yes, just like how poor people can get 1.5 trillion in subsidized payday loans to cover the gap between pay checks...oh wait. It’s absolutely a bailout.

If a payday loan required full collateral this comparison would make sense.

Re: U.S. Labor Department allows unemployment benefits for coronavirus

#40
post #13

Earlier quoted context omitted.

As mentioned in another comment, its a loan, not free cash. Investment banks will have to pay it back afterwards.

Sure, but it's basically free money for them because they'll turn around and loan it to the rest of us with higher interest rates.

No, this is short term lending (e.g. overnight).
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